South Africa: cement sales data resume after ban

26 November 2010

The publication of cement and concrete sales statistics, which were banned by the Competition Commission when it launched an investigation into anti-competitive practices in the cement industry, are to resume.

Bryan Perrie, the managing director of the Cement & Concrete Institute (C&CI), confirmed on Wednesday that the C&CI would resume publication of the statistics. But, on instruction from the commission, only one national domestic monthly figure would be distributed.

Perrie said all producers who contributed to the statistics would, as in the past, submit their figures to a firm of independent auditors, who would then make the approved national monthly figure available to the C&CI for distribution.

The national monthly figures between last November and October this year would be distributed to the existing C&CI mailing list and be available on the C&CI website today.

"Thereafter the national monthly figure will be distributed on a monthly basis, as in the past," he said.Molebogeng Taunyane, a spokeswoman for the commission, confirmed on Wednesday that the commission had permitted the C&CI about a month ago to resume publication of cement and concrete sales data.

This followed the commission receiving a number of representations from third-party users, including the central bank and economists, related to this information.

But Taunyane said the C&CI must only publish the figures in an aggregated format, which meant there should only be a single figure regarding the national production of cement instead of detailed figures.She confirmed that the commission’s probe into anti-competitive practices in the industry was "still ongoing".

Pretoria Portland Cement (PPC) admitted in November last year it had been granted conditional leniency from prosecution under the Competition Act in exchange for its disclosure of all cartel activities between PPC and its competitors.

The commission said PPC had confirmed in its application for leniency the existence of a cartel to divide markets among the four cement producers to maintain the market share that each producer held prior to 1996, when a lawful cement cartel existed and was regulated by exemptions to the competition legislation.

The agreement was implemented until 2009 through highly disaggregated sales data each producer submitted to the C&CI through an audit firm appointed by C&CI.

The commission added that there was also an agreement that PPC would not compete in northern KwaZulu-Natal in exchange for Lafarge not competing with PPC in the Botswana market.

In May this year, the commission confirmed a second of South Africa’s four major cement producers had approached it and committed to co-operate with its investigation, but declined to identify the company.

The approach by the unidentified company signalled a change of heart by either Lafarge, AfriSam or NPC-Cimpor because the initial reaction from all three firms to PPC’s disclosures was to profess their innocence and deny any anti-competitive practice.

The C&CI also denied it had ever been involved in or aware of any anti-competitive behaviour, either in its professional capacity or on behalf of any of its cement-producing members.

On Wednesday, Taunyane was unable to say when the commission’s investigation would be completed, adding that the one-year time limit for the commission to complete probes only applied to matters where the commission received a complaint and not to investigations initiated by the commission.
Published under Cement News